Understanding the National Financing Issues NIGERIA Professor Ignatius

Understanding the National Financing Issues: NIGERIA Professor Ignatius UVAH, Ph. D (Cantab) Deputy Executive Secretary, National Universities Commission, Abuja, Nigeria

Summary of Presentation • Sources, System and Trends of funding for Nigerian universities; • Data on academic staff and staff retention in the Nigerian university system; and • Strategies for retention of academic staff in Nigerian universities. 2

Sources of University Funding 1 • Two major sources of funding for Nigerian universities are: – The Proprietor (proprietor funding); and – Others (Non-proprietor funding). 3

Sources of University Funding 2 • The Proprietor: – Is the: • Federal Government - 27 federal universities; • State Governments - 33 state universities; and • Private corporate organizations - 34 private universities in Nigeria; – Provides core funding for universities. 4

Sources of University Funding 3 • Sources of non-proprietor funding, aka Internally Generated Revenue (IGR) are: – Student fees for: • Tuition (state and private universities only); • Utility and other services; – Endowments; Consultancies; – Interest on bank deposits; Investment income (capital market, etc. ); – Rent on facilities; and Special grants & Donations (in cash or kind); etc. 5

Sources of University Funding 4 • There are no legislative limits on IGR or attraction of capital by institutions. 6

Funding System: Federal Universities 1 • Legal framework for funding system for federal universities: – Constitutionally, the National Assembly is empowered to make financial appropriation to all sectors including education; – The National Universities Commission is empowered by Federal Law (LFN 2004, CAP N 81, Sections 4(1)f and 8) to receive block grants from the Federal Government and to disburse these to Federal universities. 7

Funding System: Federal Universities 2 • The Current Funding System: – The National Assembly makes appropriation to individual universities upon recommendation of the President; – The President's recommendation is based on the outcome of a budget process (3 -year medium-term strategy) involving such stakeholders as the universities, NUC, FME, FMF and the National Planning Commission. 8

Funding System: Federal Universities 3 • The other funding system – Block Grants: – FG made block grants, differentiated into capital and recurrent grants, to universities; – NUC divided the recurrent grants into Overhead and Personnel costs at 40: 60; – NUC distributed recurrent grants to universities on the basis of FTE, historical funding & other criteria. ; – NUC distributed capital grants on the basis of generation of the universities. 9

Funding System: Federal Universities 4 NUC Funding & Fund Utilization Criteria: • Personnel costs to overheads – 60: 40. • Internally generated revenue - 10% min. • Expenditure: – Academic to non-academic 60: 40; – Central administration - 25% max. ; – Library 10%; Research costs 5% - min. ; and – Capacity building 1% of total recurrent – min. 10

Funding Trends: Federal Universities 1 Trends AMOUNT RECEIVED (N) YEAR Recurrent Capital 1998 7, 295, 447, 523. 50 2, 502, 945, 000. 00 1999 10, 362, 430, 271. 98 1, 469, 500, 000. 00 2000 28, 206, 218, 865. 91 1, 936, 785, 632. 00 2001 28, 419, 719, 502. 84 4, 226, 691, 359. 00 2002 30, 351, 483, 193. 00 2003 34, 203, 050, 936. 33 2004 41, 492, 948, 787. 01 11, 973, 338, 699. 00 2005 49, 453, 098, 168. 72 8, 822, 869, 440. 00 2006 75, 400, 267, 475. 00 6, 976, 416, 815. 00 2007 76, 603, 850, 516. 00 8, 981, 237, 934. 00

Funding Trends: Federal Universities 2 Trends 90 80 Billions 70 60 50 40 30 20 10 0 1998 1999 2000 2001 Recurrent 2002 Capital 2003 2004 2005 2006 2007

Funding Challenges: Federal Universities • Funding Challenges: – Based on projected earnings, Government provides a budget cap (envelope) to all sectors including education. This influences funding for the federal universities; – Federal universities are not allowed to charge tuition fees; – Costs are high – poor national infrastructure & facilities for power and water supply; – Institutions complain of inadequate funding. 13

Funding System for State Universities Sources: • Statutory State Government allocation to their universities; • In some States, local governments contribute 5% of their FG allocation; • Student fees for tuition and other services; • Other IGR. 14

Funding System for Private Universities Sources: • Proprietor – initial capital and recurrent requirement; • Student fees – subsequent recurrent costs and development; • Other IGR. 15

Staff Development and Retention 1 • Total number of academic staff in the Nigerian university system as at May 2007 was 30, 452: • Male – 25, 133 • Female – 5, 319 • Professors – 5, 062 16

Staff Development and Retention 2 • An NUC study on retention of academics covering 16, 402 staff in 30 universities during the five-year period, 2001/2002 – 2005/2006, showed that: – 5. 13% of the staff left the universities; • 1. 01% left to work abroad; • 4. 12% left to work in other sectors in Nigeria; – Staff that had previously left the university system but returned during the study period were: • 12. 4% of those lost during same period; but • 0. 62% of all academics in the system; and – Net loss to the system was equivalent of 4. 44% of total academic staff on the ground. 17

Enhancing Staff Retention • Suggested strategies for staff retention: § Putting in place an internationally competitive reward system; § Improving work environment for teaching, research and service; § Basing university budgets on unit cost; and § Allowing federal universities to share unmet costs with users of their services – charge tuition fees. 18

FINITO Thanks for your attention and God Bless 19